TMI Blog2019 (10) TMI 631X X X X Extracts X X X X X X X X Extracts X X X X ..... sting company namely M/s On Track Trading Ltd. is not proved by the assessee resulting into adding the same u/s.68 of the Act, to which the CIT(A) has upheld the same. - Decided against assessee. - ITA No.97/CTK/2015 - - - Dated:- 14-10-2019 - Shri C.M. Garg, JM And Shri L.P. Sahu, AM For the Assessee : Shri J.B.Sahu, Advocate For the Revenue : Shri S.M.Keshkamat, CIT DR ORDER PER L.P.SAHU, AM: This is an appeal filed by the assessee against the order of CIT(A), Cuttack, dated 31.12.2014 for the assessment year 2009-2010 on the following grounds of appeal :- 1. That the order dated 31.12.2014 passed by the Ld. CIT (Appeal) in IT Appeal No. 0622/2011-12 is illegal, arbitrary and unsustainable in law. 2. That the impugned addition of ₹ 4,31,15,000/- representing share application money of M/s On Track Trading Ltd purportedly under section 68 of the IT Act is illegal and arbitrary. 3. That the appellant having submitted relevant evidences with regard to the amount invested by the said investing foreign company, it is n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tisfactory and therefore he did not accept the same. Since the beneficiary of such fund flow is none other than the assessee company, the sum of ₹ 4,31,15,000/- found credited in the books of the assessee in the impugned financial year was taken by AO as unexplained income and is charged to Income-tax u/s.68 of the Act. 3. Feeling aggrieved with the order of AO, the assessee appealed before the CIT(A) and the CIT(A) after considering the submissions of the assessee and findings of the AO dismissed the appeal of the assessee observing that as the creditworthiness of the foreign investor company could not be established by the assessee firm and also the reasons for investment in the assessee company could not be substantiated, therefore, the CIT(A) agreed with the finding of the AO that the amount should be treated as unexplained cash credit of the appellant company and should be added to the total income of the assessee. 4. Further feeling aggrieved, the assessee is in appeal before the Income Tax Appellate Tribunal. 5. Ld. AR submitted that the assessee having submitted relevant evidences with regard to the amount invested by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment order framed by the AO and all the documents and details submitted by the appellant during appeal hearing. The documents mostly include the incorporation, memorandum of association, articles etc. of the foreign company M/s. On Track Trading Ltd. and the documents regarding banking transactions of shares as contended by the appellant and as noted above. From the verification of all the documents it is evident that amount had come in foreign currency through banking channels to the appellant company. Since the investing foreign company has been registered etc. it appears that it has an identity. But the most important evidence missing in the whole transaction is the proof of creditworthiness of the investing company. The appellant during appeal hearing submitted statement of accounts of the investing company for the month of August,2008 only. From the perusal of such documents it is found that there has been payment to Gopalpur Ports Ltd. on 01.8.2008 amounting to 5,00,000$ and on 25.8.2008 amounting to 500000$. From this copy of one month statement which is neither authenticated nor signed by the appellant it is observed that there has been multiple number of time de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onal, has not produced any confirmation or Income-tax payment details, did not prove its creditworthiness for advancing the above amount of share application money and more over is not assessable to Income-tax as per the law of the land. The appellant had produced case citations which are also not applicable to the present issue and distinguishable from the appellant company and the foreign investor company. As the creditworthiness of the foreign investor company could not be established by the appellant firm and also the reasons for investment in. the appellant company could not be substantiated, I am inclined to agree with the finding of the AO that the amount should be treated as unexplained cash credit of the appellant company and should be added to the total income of the company u/s.68 of the Act. The AO s action thus confirmed. 8. From the above observations of the CIT(A) it is clear that the assessee has not produced any confirmation or income-tax payment details. It is not in dispute that the amount has been received through banking channel i.e. there is genuineness transactions. Further in regard to identity of the share applicants that the assessee had ..... X X X X Extracts X X X X X X X X Extracts X X X X
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